HELB Readies To Go After Defaulters As Agency Hires Debt Collectors
The Higher Education Loans Board (HELB) has announced an open tender for debt collection services to recover funds from defaulting beneficiaries, as the government agency continues to face financial constraints.
HELB advertised on MyGov that it was looking for a qualified service provider to provide debt collection services for two years.
Interested and eligible firms have until October 1 to submit applications, which can be done by downloading the tender document from the HELB’s official website.
“HELB invites interested, experienced and reputable debt collectors to submit their closed tenders,” the statement read in part.
Bidders must also notify HELB of their participation in the tender process by sharing their firm’s email address and other details to procurement@helb.go.ke in case of need to be contacted.
The HELB fund is intended to operate on a revolving basis, with beneficiaries who complete their vocational training paying back to support a new group of students.
This, however, has not been the case in recent years, with difficult economic conditions forcing beneficiaries to default.
Beneficiary default on HELB loans, combined with other factors, has had a negative impact on the institution’s financial muscle and ability to adequately cater to needy students seeking higher education.
According to Dr. Vincent Gaitho, Pro-Chancellor of Mount Kenya University (MKU), the government’s allocation per state-sponsored student in private universities has dropped from Ksh70,000 to Ksh40,000 in just eight years.
In the fiscal year 2023/2024, HELB funded 606,329 students for a total of Ksh 33.45 billion.
This brings the total number of fund beneficiaries to 1,696,781 since its inception.
By the end of the 2023/2024 fiscal year, HELB revealed that 986,674 loans totaling Ksh 127.81 billion were due for collection and under recovery efforts.
HELB has attempted several approaches to recover loans from defaulting borrowers, including communication and outreach, incentive programs, and flexible repayment plans.
In June 2024, HELB announced the launch of a new application portal for the academic year 2024/2025 under the new funding model.
One of the more contentious aspects of the new funding model is how money will be distributed.
Instead of receiving block funding in the form of capitation, student loans will be distributed through scholarships and household contributions.
HELB Readies To Go After Defaulters As Agency Hires Debt Collectors
